The first-time founder’s ultimate guide to pitching a VC

Just because you’ve binge-watched “Shark Tank” doesn’t mean you know what it takes to deliver a successful pitch to investors.

Persuading a venture capitalist to support your business is both an art and a science — and few first-time founders get it exactly right. Still, you’ll want to avoid the most common mistakes and most egregious turnoffs.

To that end, we asked experts in entrepreneurship to distill their years of experience into concrete advice.

David Rose runs Gust, a digital platform for early-stage entrepreneurs and investors, and Rose Tech Ventures, an angel investment fund and incubator. Liz Wessel is the cofounder and CEO of WayUp, a jobs platform for early-career professionals. And Patrick McGinnis is the managing director of the investment and advisory firm Dirigo Advisors.

Read on for a series of practical (and nonobvious) tips on pitching a VC.

Before you pitch

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Determine whether the business is appropriate for investment in the first place

If you’re bringing in a maximum of $1 million a year in revenue, “it may be a great, wonderful, much-needed business,” Rose said. “You may enjoy it and support your family.” But he emphasized, “the economics are just such that there is no way that you can get an investment from me at any reasonable number for that to make economic sense.”

This is because outside investors expect outsize returns on their money, often a large multiple of what they put in. And if there’s a low-millions ceiling on the revenue your startup can generate or eventual exit price, there’s not much incentive for a venture capitalist to write you a check.

In other words, your company may be a “lifestyle startup,” which doesn’t require venture capital and probably won’t ever be worth $1 billion.

Raise capital as late as possible, after you’ve gotten proof of concept

An entrepreneur’s pitch is a “combination of science and faith,” said McGinnis — but you want to stay more on the side of science than faith.

McGinnis often sees founders who don’t have any proof their idea is viable. You’d be wise to keep your day job and acquire customers and data before you ask a VC for money.

VCs wouldn’t be hearing your pitch if they didn’t want to invest in your business, Rose said. They’re just hoping you’ll give them a compelling argument for why they should partner with you.

Have two versions of your deck

One version is for your presentation, and the other is the one you send via email, Wessel said. The difference is how much detail you go into in each slide.

The version that you’re presenting shouldn’t be able to be understood without narration, meaning it should have as little text as possible. Otherwise investors may spend all their time focused on trying to read the screen, rather than on listening to your vision.

Have a high-quality deck

There should be a detail-heavy version, though, which you can use for follow-up discussions. According to McGinnis, “If you can’t make a decent-looking pitch deck” (without typos and with correct info), “how can I believe that you can build an app or a product that will be excellent?”

Making a solid first impression is important, McGinnis added, because even if the investor doesn’t want to invest in this particular company, the investor may be able to introduce you to other people. Or, the person may invest in your company in the future.

Never meet the investors you’re really targeting first

Start with the “B team,” McGinnis said, i.e., the VCs who would be nice to have but aren’t your first choice. Get feedback from them so you’re more than prepared when you meet the VCs you’re really targeting.

During the pitch

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Don’t ask for a valuation that’s absurdly high

Unless you’ve already founded a company that has sold for millions of dollars, “it’s hard to prove that you alone are worth that much,” Wessel said. What it does show is that you’re neither self-aware nor realistic.

Know your numbers

Simply put, show that you’ve done your research, Wessel said.

Show that you are the best person in the world to solve this problem

Wessel advised demonstrating to the VCs what you’ve already done to understand your customers or to take a stab at solving the problem.

McGinnis recommended flaunting your industry expertise. “Loving something is necessary but not sufficient” for starting a company, he said.

Above all, Rose said, remember that you’re pitching yourself — not just your business plan. “You bet on the jockey, not the horse.”

Know and communicate how you’re different from your direct competitors

If the VC knows something you don’t about the competitors in this space, “you’re in real trouble,” Rose said. (Also remember that if there are no competitors, that’s a bad sign, suggesting that no one else has thought this idea was worth pursuing.)

Convey enthusiasm and passion

Investors want to know that you’ll stick with this business through the ups and downs, Wessel said.

After the pitch

See if there are any trends, Wessel said, and then figure out how to address those gaps in your pitch.

Suggest an action plan in a thank-you note

Always follow up with a thank-you note, McGinnis said. “Try to offer new positive information” that you may not have mentioned during the pitch.

Wessel recommended reminding the investors of specific topics you enjoyed discussing with them.

Just as important, McGinnis added, “propose concrete next steps for them to react to — amorphous communication conveys amorphous management.” Reiterate specifically what you’re asking for, and ask whether there are other people you should meet who the investors can introduce you to.

Create FOMO

Once you’ve gotten an offer from one VC, don’t hesitate to let the others know. The idea, McGinnis said, is to communicate urgency: “The train is leaving the station. Are you in or are you out?”

Ready to make your first pitch deck? Here’s a great template to follow, from an entrepreneur who raised a $6 million seed round from all-star founders behind Dropbox, Yammer, and Yelp.